ICA May Sell Stake in Airport Unit to Raise $400 Million

Empresas ICA SAB (ICA*), Mexico’s largest construction company, may sell as much as 100 million shares in its airport operator in a transaction that could raise about $400 million.

Aeroinvest SA, a subsidiary of Mexico City-based ICA, filed a shelf registration with the U.S. Securities and Exchange Commission to sell the Series B shares in Grupo Aeroportuario del Centro Norte SAB (OMAB), which is known as OMA. Shares in the airport operator fell 0.6 percent to 49.03 pesos at the close in Mexico City, before the registration was filed.

The possible sale would allow debt-burdened ICA to raise money while maintaining control of the San Pedro Garza Garcia, Mexico-based airport unit through another class of shares known as Series BB. ICA’s debt climbed to 54.2 billion pesos ($4.4 billion) as of March 31, 15 percent higher than a year earlier, while earnings before interest, taxes, depreciation and amortization fell 21 percent to 1.11 billion pesos, the company said April 26.

The shelf registration is a positive for ICA since it comes at a time when the shares trade at a higher premium than some international peers, Credit Suisse analysts Eugenio Amador and Julian Bravo said in a note. The proceeds “are likely to be used for growth” or to meet short-term obligations, they wrote.

New Projects

President Enrique Pena Nieto is expected to announce a national infrastructure plan as early as next month, according to the Mexican Construction Industry Chamber, a trade group representing builders.

ICA’s shelf registration would be valid for three years if declared effective by the SEC, ICA said in a statement to the Mexican Stock Exchange. The company controlled 234.5 million OMA shares as of Dec. 31, representing 58.6 percent of the airport company’s stock, it said in a regulatory filing last month.

OMA operates 13 Mexican airports including those serving the northern business capital of Monterrey and the Pacific resort of Acapulco. Excluding a maintenance provision and construction activity, its earnings before interest, taxes, depreciation and amortization advanced 12 percent in the first quarter to 393 million pesos, or 56 percent of revenue.

The possible share sale shows that ICA is seeking to raise money even if it means reducing its stake in one of its most profitable assets, said Javier Gayol, an analyst at Corporativo GBM SAB. The company's airport division generated 23 percent of Ebitda, as the measure of cash flow is known, while accounting for only 8.3 percent of sales, according to Gayol.

“This is a good way to raise money, but you’d be losing participation in a stable asset with good cash generation and very strong margins,” Gayol said in a telephone interview from Mexico City. “To me this says the company has a huge need for capital.”

To contact the reporter on this story: Brendan Case in Mexico City at bcase4@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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